Our goal is to understand the mechanisms by which information encoded in an extracellular signal is converted into complex patterns in the developing mammalian embryo. This proposal focuses on the role of Sonic hedgehog (Shh) signaling. The Shh signaling pathway is not only essential for the induction of clinically relevant neurons within the CNS, but inappropriate activation of Shh signaling has been linked to the development of several types of tumor, most notably basal cell carcinoma (BCC) (the most common form of skin cancer), medulloblastoma (the most common brain tumor of children) and rhabdomyosarcoma (the most prevalent soft tissue cancer in children). Further, loss of Hedgehog (HH) signaling underlies several birth defects that include holoprosencephaly. Consequently, understanding how a Shh signal is received, transduced and modulated is likely to lead to new biological insights with direct relevance to human health. Given the close human parallel and advantages of available genetic approaches, the mouse is our principle experimental system. Aim 1 proposes to explore the biological significance of cholesterol modification of Shh investigating the role of a Dispatched gene in Shh release and the requirement for cholesterol in Shh-mediated patterning of the neural tube. A GFP tagged Shh protein will be generated to study Shh movement in vivo. Aim 2 proposes to explore the genetic interactions amongst several Shh-binding proteins (Ptch1, Ptch2, Gas1 and Hip1) that appear to act in Shh-mediated feedback control as they relate to neural patterning. We will map the interaction domains between Shh and one of these, Hip1. Aim 3 will explore the roles of several novel targets of HH-signaling identified in transcriptional screens. Aim 4 proposes to characterize a new inducible model of HH-mediated tumorigenesis.